# Lease Calculator

URL: https://speedycalculator.com/calculators/finance/lease/
Last updated: 2026-10-25

> The lease calculator works out the periodic lease payment for equipment, a vehicle or any asset from its value, residual value, lease term and interest rate, with payments in advance or in arrears – and the total cost compared with the purchase price.

## Inputs

- Asset value
- Residual given as
- Residual value
- Lease term (years, months)
- Interest rate (%)
- Payments made

## Results

- Residual value
- Monthly lease payment
- Total of lease payments
- Total interest
- Total cost to own (payments + residual buyout)

## Formula

```
Payment = (value − residual ÷ (1 + i)^n) × i ÷ ((1 − (1 + i)^−n) × (1 + i × timing))
Total lease cost = payment × n
Interest = total payments + residual − value
```

## Explanation

A lease payment pays for the depreciation of the asset plus interest on the money tied up in it. A higher residual value means lower payments. Payments in advance (at the start of each month) are standard for most leases.

### How to use the Lease Calculator

- **Asset value**
- **Residual given as**
- **Residual value**
- **Lease term**
- **Interest rate**
- **Payments made**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the asset value, residual value, lease term, interest rate and payment timing.

### Tips

- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.

### Common mistakes to avoid

- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.

### Inputs explained

FieldWhat to enterAsset valueAmount in your currencyResidual given asChoose one: Percentage of value, AmountResidual valueA numberLease termUnits: years, monthsInterest rateIn %Payments madeChoose one: Beginning of each period, End of each period

### What each result means

- **Monthly lease payment** = pmt([Interest rate]÷1200, [Lease term], [Asset value], [Residual value], [Payments made])
- **Total of lease payments** = [Monthly lease payment]×[Lease term]
- **Total interest** = [Total of lease payments] + [Residual value] - [Asset value]
- **Total cost to own (payments + residual buyout)** = [Total of lease payments] + [Residual value]

### Example values

How the main result changes when **Asset value** changes and everything else stays at the example values above:

Asset valueMonthly lease payment22,500466.6233,750699.9345,000933.2456,2501,166.5567,5001,399.8690,0001,866.48

## Worked example

Inputs — Asset value: $45,000; Residual given as: Percentage of value; Residual value: 40; Lease term: 3 years; Interest rate: 7 %; Payments made: Beginning of each period.

Results — Residual value = $18,000.00; **Monthly lease payment = $933.24**; Total of lease payments = $33,596.56; Total interest = $6,596.56; Total cost to own (payments + residual buyout) = $51,596.56.

## FAQ

**How is a lease payment calculated?**
It covers depreciation (value − residual) plus interest, spread over the term.

**What is a residual value?**
The asset's estimated value at the end of the lease.

**Is leasing cheaper than buying?**
Payments are lower, but you don't build equity.

**What formula does the Lease Calculator use?**
Payment = (value − residual ÷ (1 + i)^n) × i ÷ ((1 − (1 + i)^−n) × (1 + i × timing)).